Taking The Bait

5/17/2009 2:00 AM Eastern

By: George Winslow

Despite a tough economy, independent programmers are beefing up their investment in multiplatform plays, using online, on-demand, HDTV and mobile offerings to gain viewer, advertiser and operator attention.

Some newer networks have already found that a multiplatform strategy can help overcome a tough distribution climate for independent programmers, which lack the market clout of the big media groups.

“For us and for the cable operators, having a well-developed multiplatform offering and strategy is almost as important as having a great channel,” said Gospel Music Channel president Charley Humbard.

The ability to target a large, underserved audience with a linear channel, a popular online fan site, VOD and mobile offerings has helped Gospel to rapidly grow its distribution, according to Humbard. Since the start of 2008, the channel more than doubled its reach to 45 million homes, while achieving rapid growth in both VOD and online. In 2008, GospelMusicChannel.com more than doubled its number of unique visitors, becoming the most popular Web site for gospel music fans.

For more-established independents already with significant distribution, multiplatform efforts are a means to compete with larger programming groups for advertising revenue.

“Among the advertising community there is an expectation that you have a multiplatform offering,” said David Kenin, executive vice president of programming at Hallmark Channel and Hallmark Movie Channel. “If you are a top-10 network like Hallmark, you have to be competitive with the vertically and horizontally integrated networks like USA [Network], TNT and ESPN. We have to offer advertisers the same options and benefits they do.”

While independent channels still lack the resources of the largest programming groups and many of their multiplatform investments are relatively nascent, several channels are already claiming that cross-platform strategies have played a key role in their growth.

“We have jetted from 3.5 million homes to over 33 million homes in two short years and the secret to that growth is routed in our multiplatform strategy,” said Ovation TV CEO Charles Segars. “The arts is a unique category in a sea of much of the same, and we superserve that audience through linear, VOD, local VOD, broadband and a brick-and-mortar strategy.”

Rural Media Group and RFD-TV president and founder Patrick Gottsch said his network has expanded its distribution to more than 40 million homes, by targeting the void left by The Nashville Network with programming aimed at rural viewers and others interested in the rural lifestyle. RFD expects to reach 50 million homes by year-end, he said.

This month, the network — which currently attracts about 11 million viewers a week, up from 9.4 million in 2008 — concluded a master affiliation agreement with Time Warner Cable that will also provide carriage for its HD simulcast feed.

Gottsch added that RFD is now planning an aggressive expansion of its online, VOD and mobile operations. “With the new administration putting money to wire rural America as part of the stimulus package, we want to be there to provide content,” he said.

Rural Media Group and RFD-TV chief operating Ed Fizer explained the channel’s growing reach by arguing that: “So many of cable channels look alike these days. They are all charging after the 18-to-34 demo and their programming is increasingly looking pretty much the same. There is a demand for programming that is completely unduplicated and completely unique.”

Still, many independent networks are backing their online and cross-platform initiatives with tight budgets. Until recently, Kenin noted, Hallmark’s drive to boost profits limited it to “small dollars and a lot of manpower time to try to develop our Web sites.”

But the network has found creative ways to expand its Web offerings. For some time, it has been creating original content for the site tied to all of its new movies.

“In some cases we’ve even created prologues and epilogues for the movies that we’ve then made available online,” Kenin said.

Those efforts have boosted site traffic, with the number of unique browsers visiting Hallmarkchannel.com growing by 115% in March 2009, compared to a year earlier.

And the promotions seemed to have helped the Hallmark Channel, which ranked number No. 8 among cable networks in April. Overall, the channel was up 20% among women 18 to 49 and 25% among women 24 to 54 in primetime in April 2009 versus April 2008, per Nielsen Media Research provided by Hallmark.

With its linear channels firmly in the black, Hallmark is in the process of ramping up its online investment, Kenin said. The programmer is in the process of negotiating rights for a Web-exclusive comedy series, he added.

“It will allow us to test it and if it works, which I think it will, then we’ll put it on the channel,” Kenin said.

Another well-established indie, the 15-year-old Outdoor Channel, is also emphasizing its Web offerings, said chief operating officer Tom Hornish. About two and a half years ago, the channel revamped its programming and on-air look; and then about a year and a half ago, launched a new Web site with a video player.

In 2008, those efforts helped boost the linear channel’s ratings by about 30%, over 2007, and increased Web traffic. The site now gets about 500,000 unique visitors each month, Hornish said.

The channel has also launched a VOD product and four years ago developed a separate HD channel, which was converted last year to a high-def simulcast of the standard-def feed. Outdoor Channel HD now has more than 1 million subs.

But it’s often easier to use an established, 30 million-home channel to drive Web efforts, as Outdoor has done, than use online properties to drive TV distribution, Hornish noted.

“I think the biggest hurdle the independents have is getting linear carriage,” he said. “Because we are an established channel with distribution, we can use the old media, so to speak, to drive the new media. It is very difficult to drive [Web] traffic without having a marketing capability of a channel that reaches tens of millions of people.”

One independent programmer that is well equipped to use both “old media” and “new media” to bolster its channel is Intermedia Outdoor, which owns The Sportsman Channel as well as a wide array of magazine, radio, TV and online businesses.

“Intermedia Outdoor’s whole approach is to serve sportsmen not only through the channel, but with TV production, a vast print portfolio and a wealth of Web sites that support more than 40 brands,” said Sportsman president Willy Burkhardt.

One illustration of that strategy is the channel’s new program Fly Fisherman, which is closely tied to the company’s popular Fly Fisherman magazine.

“In June we will be launching a fully redesigned Web site for Fly Fisherman,” Burkhardt said. “As we move through the season you’ll start to see topics that are covering in television getting a different and richer coverage in the magazine.”

Later, stories and photos posted by users on the Web site will be featured on the television program. “Fly Fisherman will be a model of what we can do across all three platforms,” Burkhardt said.

That multiplatform strategy has paid off in expanding distribution, which has grown over 800% in the last 18 months to about 17 million subs, added senior vice president of affiliate relations Mark Kang.

“Because of our magazine subs and our multimedia platforms in radio, on television and online, we can offer operators access to our subscribers so they can build their subscribers,” said Kang. “That’s been a revolutionary idea.”

Another rapidly expanding network is Retirement Living TV, which got a major boost earlier this year when Comcast agreed to make a strategic investment in the channel and launch it on a digital tier that reaches about 12 million homes.

The channel, which is also fully distributed by Verizon Communications’ FiOS TV, is now in 4.8 million homes. “If we don’t do any more distribution deals, we expect to be in 15 million by the end of the year, and we expect to be doing more deals,” said general manager Patrick Baldwin.

Retirement Living has been careful not to hurt its affiliates by making too much content available online. But it is ramping up the amount of available clips on Comcast.net and the MSO-owned Fancast.com site, and looking to establish similar online partnerships with other affiliates.

“It is a very important business for them and unlike a lot of big media companies that want to keep their content for their own Web sites, we want to work closely with them to help them build it,” Baldwin said.

He also noted that RLTV has done a number of cross-platform advertising deals with companies like Prudential and UnitedHealthcare and said he sees more opportunities in that area.

For instance, online dating site Perfectmatch.com helped cover production costs of the dating show it sponsors, Another Chance for Romance. The program follows older couples who meet via the site.

To boost its linear distribution, ReelzChannel has been offering the channel to operators free of charge, relying entirely on advertising.

“We’ve been in business only two and a half years and we’re up to 45 million homes,” said Hubbard Media Group and ReelzChannel CEO Stanley E. Hubbard. He expects the channel to hit over 50 million homes this year.

“Believe me, I wish we had a license fee,” he said, “but if we did, we wouldn’t have the distribution we have now.”

Reelz, which targets movie enthusiasts with the tagline “TV About Movies,” has also made digital media a key part of its expansion strategy. While it doesn’t make full episodes of its programming available online, the Web site now attracts over 1.6 million unique visitors — making it one of the most popular sites run by an independent network — and in the past year, clips from its shows were viewed 95 million times on YouTube.

As part of its digital strategy, the channel has also localized both the Web site and the linear channel.

At ReelzChannel.com, viewers can search for listings for movie theaters as well as for films that air on their TV provider.

Twice each hour, the national feed of the TV channel offers recommendations of movies airing on pay-per-view and premium channels. To localize this for affiliates, Reelz has placed servers at each headend. These servers insert information showing the exact time and channel number of the recommended movie.

Such efforts have made ReelzChannel an increasingly valuable partner for their affiliates, according to Hubbard. “We have research showing that ReelzChannel viewers have significantly more PPV and VOD buys,” he said.

Localization also plays a major role in Ovation TV’s multiplatform strategy, according to Segars. The channel has cut deals with a number of major U.S. cultural institutions and regularly uses those ties to create content for the local VOD platform, as well as the linear channel.

In Chicago, for example, Ovation created a program around a Jeff Koones exhibit that first aired on Comcast’s local VOD platform and then bowed on the linear network nationally. In addition, the channel has built up a Web site with a large community of users who’ve posted over 60,000 images and videos of various works of art to the site.

“Having this network of people who are very passionate about the arts and our programming makes us very valuable to both operators and advertisers,” Segars said.

HorseRacing TV, which is now available in over 17 million homes, is also about to embark on a much more aggressive multiplatform strategy that it hopes will dramatically boost the sport’s popularity.

HRTV executive vice president and general manager Jim Bates noted it was too early to provide details of the strategy, which they expect to launch this summer, but stressed that they see broadband delivery as a major growth opportunity.

“Because of the nature of our content, we see it as a very fertile area for growth,” particularly as operators look for broadband content to strengthen the competitive position of their high-speed data offerings, he said. “Horse racing was the third most popular sport in America in the 1950s. We hope to use TV and these other applications to put it back on the map.”